(This is an updated version of an earlier story published on 28 January)

Pressure is mounting on top Congress leaders including former Prime Minister Manmohan Singh and former finance minister P Chidambaram to respond to the charges that UPA government went out of the way to push public sector banks extend both fund and non-fund support to Vijay Mallya’s now grounded airline Kingfisher that owes Rs 9,000 crore to some 17-banks.

In a press conference on Monday, the BJP basically repeated the findings of a CNN-News18 expose (read here) that cited correspondence between Vijay Mallya and the UPA top brass to bail out the failing airline. “Letter shows Manmohan Singh expressed support for Mallya; Orders were given by PMO to concerned ministries. The corrupt hands that helped Vijay Mallya in getting loans belonged to Manmohan Singh and Chidambaram (Sic),” the BJP alleged in the presser today (Monday). Responding to these charges, former civil aviation minister, Vayalar Ravi told CNN-News 18 that he can't remember “what I did but any minister in my position would do what I have done.”

With the BJP taking up the issue claiming evidence, political pressure will mount on the UPA leadership to come clean on the matter. As noted in an earlier column, the fact is Kingfisher Airlines, which never made profit in eight years of its existence, continued to enjoy the support of banks even when a crisis was brewing inside. Banks continued to offer fresh assistance despite seeing the writing on the wall. This would not have been possible without some sort of political backing to the billionaire and silent missives to banks to influence the business decision. But, this is something that warrants deeper investigations.

Vijay Mallya. AFP

Last week, the Central Bureau of Investigation (CBI) had arrested few former bankers including former IDBI Bank chairman, Yogesh Aggarwal, four other ex-officials of the bank including ex-Deputy Managing Director B K Batra and former Kingfisher CFO, A Raghunathan.

"It was first exposure to the bank. There was no need for the bank to take the exposure outside the consortium when already other loans were getting stressed," the PTI quoted a senior CBI official involved in the probe.

Clearly, the investigators have acted too late in the Kingfisher case. That too only after the media took up the issue in a major way after the liquor-baron (who offered personal guarantee to this loan) left the country on 2 March last year. The industrialist is currently believed to be in the UK. The Narendra-Modi government has made several attempts to bring Mallya back by cancelling his passport and pushing for deportation but didn’t find success yet.

Despite this, and multiple court summons, the liquor King hasn’t yet returned to the country. Even now, banks are currently struggling to recover money by selling Kingfisher assets. Much as the role of the bankers needs to be probed in the context of the violations of lending norms and corruption, the likely involvement of the political dispensation during the whole episode (Kingfisher loan was first termed as NPA in early 2012) too needs to be probed, especially in the context of reports that the UPA-government, particularly the PMO and the ministry of finance favored Mallya and Kingfisher Airlines. Only a thorough independent investigation will reveal whether the charges are true.

It’s almost a year since Mallya left the country. Since then, the liquor baron has been highly defiant and has defended his case saying he is being a victim of the media trial and unfair treatment by the government and investigators. In an April, 2016 interview to Financial Times (read here), Mallya said “by taking my passport or arresting me, they are not getting any money.” The billionaire has also contested the Rs 9,000 crore figure.

In the hindsight, Mallya has smartly used the legal system to his advantage to delay the loan recovery including forcing Kolkata-based United Bank of India to reverse its decision (to tag Mallya as wilful defaulter) getting a favourable court verdict on technical ground. Remember, the court ruled in favour of Mallya citing that instead of having three members, the grievance redressal committee of the bank had four members.

There are not too many parallels to the Mallya-Kingfisher case in India’s banking sector history. This is one of the first cases, where banks, government and judiciary have acted together to chase one individual who have guaranteed a Rs 9,000 crore loan. For that same reason, bringing Mallya and Kingfisher before the law is extremely critical to send out a strong signal to the other large defaulters, especially ‘wilful defaulters’. Not just bankers, the role of politicians in the Kingfisher episode needs to be probed thoroughly. If the UPA-government, the PMO and FM, went out of the way to help Mallya, they have a lot of explaining to do.